Supervisors refer Transbay Parcel F measures after debate over shadows, affordable‑housing fees and guarantees

The Land Use and Transportation Committee on March 8 referred three related measures for Transbay Parcel F — a zoning change, a development agreement and a successor‑agency resolution changing on‑site affordable housing requirements — to the full San Francisco Board of Supervisors without recommendation after extended questioning by supervisors about shadow impacts and the timing and security of an in‑lieu affordable‑housing fee.

Supervisors debated whether to require immediate cash payment or accept a bank letter of credit that OCII (the Office of Community Investment and Infrastructure) and the project sponsor say will be available in advance of when funds are needed. "Security to me is cash upfront," Supervisor Aaron Peskin said during the hearing, arguing that previous projects left communities with unfulfilled commitments. OCII representative Sally Orth and Hines partner Cameron Faulkner said the development agreement secures the fee and that a letter of credit is a commercially standard instrument that preserves project viability.

Orth told the committee that the Transbay redevelopment plan requires 35% of new units be affordable across the project area and that OCII’s pipeline estimates would put the area on track to exceed that target, projecting roughly 3,771 total units and an overall estimated 37% affordability. Orth summarized completed work in Zone 1 and Zone 2 and said 2,606 units have been completed to date at an average of 29% affordability. She described how the in‑lieu fee and a development agreement would make funds available for Block 4 affordable housing.

Developer Cameron Faulkner said the 150% in‑lieu fee is “an add to the parcel F budget” and that paying the fee in cash now — when the sponsor must supply equity — would impose heavy financing costs. He described the letter‑of‑credit approach as a way to “delay that payment until it’s needed for Block 4,” saying the sponsor has bank‑grade commitments and completion guarantees from partners including Goldman Sachs and Hines. Faulkner also estimated the in‑lieu fee would be “north of $45,000,000” in face value.

Supervisors repeatedly returned to shadow impacts at Willy Woo Long Playground and nearby Chinatown parks. Peskin pressed staff and the sponsor on whether the project could be sculpted to reduce shadow time on the playground; planning staff and the sponsor said prior shadow analyses (2012 cumulative Transit Center District Plan study and a 2019 project‑level analysis) concluded there would not be a "significant and adverse" impact on the plazas named in the studies. OCII representatives said CEQA findings for Block 4 had not yet been made and that they would verify sequencing and study details.

Public comment was mixed: Unite Here Local 2 urged approval and highlighted a sponsor agreement protecting hotel workers’ right to organize; the San Francisco Building and Construction Trades Council urged support for the jobs the project would create; Livable City and individual tenants expressed concern about preserving mid‑block public space on Natoma Street and warned against converting public space to driveway or garage uses. Planning staff said Natoma is a public right of way, that a mid‑block portion is temporarily bollarded for pedestrian use, and that the project’s vehicular access is planned primarily on the eastern half with a porte‑cochere and reduced off‑street parking (planning staff said an earlier planning commission submittal reduced parking from 183 to 94 spaces).

Committee action: Supervisor Dean Preston moved previously submitted amendments to the variation resolution (item 3) that the committee approved. Preston then moved to refer items 1–3 (item 3 as amended) to the full Board without recommendation. The clerk’s roll call recorded ayes from Supervisors Peskin, Preston and Chair Melgar and the committee referred the measures to the Board without recommendation. A separate motion by Supervisor Peskin to continue the items one week to get additional information about Oceanwide precedent, corporate guarantees and sculpting failed on a 1–2 roll call (Peskin yes; Preston and Melgar no).

What’s next: Because the committee referred the measures without recommendation, the items will advance to the full Board of Supervisors with the committee’s amendment to item 3 noted; the Board will consider the ordinances and the OCII variation resolution on its March 16 calendar unless the Board amends scheduling. The committee record shows open questions about CEQA sequencing, the mechanics and timing of the in‑lieu payment, and possible design adjustments to reduce shadows on Chinatown parks.